By the Charity Commission at WCVA's Charity Law Conference 2013.

1. Risk and regulation: our approach to
your concerns

2. Contents
•Introduction
•The strategic review and our structure
•Common concerns and how we find out about them
•Our approach: The Risk Framework
•Case studies
•Key points and conclusion
•Sources of information

3. • The Commission’s key priorities:
o developing the compliance and accountability of the sector; and
o developing the self-reliance of the sector.
• The Commission’s focus is on:
1. Registering charities
2. Taking action to deal with serious mismanagement or abuse of
charity
3. Ensuring charities are accountable to the public by requiring and
publishing information
4. Giving permissions as required in law
5. Providing web-based guidance to trustees to enable them to
manage their charity effectively
Strategic Review

4. 1. First Contact: Telephone calls
E-mails
Letters
2. Operations
3. Pre-investigations, enforcement and monitoring
4. Investigations and enforcement
The Commission’s
operational structure

5. Common concerns
• Dissatisfaction with charity services by
beneficiaries or public
• Internal disputes
• Issues with employees/volunteers
• Unmanaged conflicts of interest
• Breaches of governing document/charity law
• Criminal activity e.g. fraud/theft

6. How do we find out about
concerns?
•Complaints – from public, beneficiaries, trustees
•Report of Serious Incident (RSI)
•Whistleblowing e.g. by accountant/auditor
•Other agencies raising concerns e.g. funders,
Police
•Media

7. Our approach:
the risk framework
The Commission’s risk framework:
• Stage 1 – Does the Commission need to be
involved?
• Stage 2 – Assess the nature and level of risk
• Stage 3 – Possible outcomes

8. Case study A
Dear Sir/Madam,
I would like to be contacted regarding non-payment of wages from
30th August to 30th November by the charity. Myself and two
members of my team were contracted to carry out filming and editing
work which we completed, we were however not paid.
This case has been taken to employment tribunal and the judge has
accepted and ruled that the charity should pay the sums owed. Three
months after the tribunal ruling we have still not received any form of
payment and are still dealing with the issues surrounding non
payment of wages. I look forward to your support in this quite
stressful matter.
Thank you.

9. Case study B
During the external audit of the accounts, our auditors raised a number
of concerns in relation to expenditure by our CEO.
These issues relate to personal expenditure charged to the charity’s
credit card and £1850 of cash drawn without adequate support or
explanation provided.
The CEO was interviewed by two Board members and admitted to
borrowing funds from the charity. The CEO was suspended whilst a full
investigation was conducted.
The CEO has now stepped down and is re-paying the funds and we
have not reported the matter to the police. In light of the CEO’s
departure, we feel that the on-going risks have been appropriately
mitigated.

10. Case study C
A third party contacted us to alert us to an allegation of
abuse at a charity.
As a social worker in a community mental health team,
he was part of a safeguarding group investigating the
incident.
The Police were also involved.

11. Case study D
A serious incident has been reported to the Commission as follows:
An independent review of the charity’s finances has found that
unauthorised payments and expenses of over £100,000 have been
taken by the chair of trustees and former finance manager.
Also, around £750,000 has been transferred from the charity’s
reserve account into its current account. From there, a great
number of unauthorised expenses and payments have been made
with no audit trail at all.
The finance manager has now left the country.

12. Key points
•Commission takes an evidence and risk-based
approach
•We tailor the level of our engagement and
involvement in line with the level of risk
•Most problems are the result of weaknesses in
governance and lack of awareness of responsibilities
rather than deliberate wrongdoing
•Commission cannot act in administration of charity
and looks to work with trustees to rectify problems

13. Sources of information
On our website (www.charitycommission.gsi.gov.uk)
please see:
•Risk Framework and Application tool
•Charities Back on Track 2011-12 – Themes and
lessons from our investigations and regulatory
casework.
•CC47: Complaints about Charities